Builder Turns 30, Aims To Diversify

March 18, 1985|By Aleen Zimberoff, Business Writer

General Development Corp., the state`s largest developer of planned communities, is marking its 30th anniversary this year with ambitious plans to diversify its real estate holdings and a desire to go into the savings and loan business.

GDC made its initial mark in the state in the 1950s with the construction of Port Charlotte on the Gulf Coast of Florida, a community of 50,000 persons that was initially marketed to retirees as homesites for $10 down, $10 a month.

From that first pilot community, the Miami-based firm -- which is a subsidiary of the privately held City Investing Company of New York -- has built Port St. Lucie, Port La Belle, Vero Beach Highlands, Vero Shores and five other communities in the state.

The housing units in those communities were priced at between $50,000 and $100,000, said GDC President Robert Ehrling. GDC sold 15,000 units in Port Charlotte, 7,000 in Port St. Lucie, 750 in Port La Belle and 1,000 in Vero Beach and Vero Beach Highlands, Ehrling said.

The company`s backbone has been to first sell homesites on a down payment, 10-year payout agreement and then to build the communities as owners demanded homes. The program allows potential homeowners to gradually pay for a small piece of property and then either sell the land or build a home on it.

A planned community is where the developer buys the land, plans the community, builds roads and canals, installs sewer lines and constructs recreational and shopping facilities.

In addition, various subsidiaries sell land, homes, arrange financing and help buyers find suitable property through a nationwide Homefinders division.

Ehrling has staked out a plan for the future to shape the company into a ``one-stop`` real estate services company.

``Someone who moves to Florida is able to come to our company and not only buy a home, but arrange financing, too. If they want to rent, we can handle the rental. We also provide most of the amenities in our developments, including golf courses, recreational facilities and shopping centers,`` Ehrling said.

The company has been protected from vagaries in the real estate market -- especially in the commercial side -- by sticking to homebuilding.

``In single-family housing, we build every little house one by one. We don`t have to build 30 stories before closing out the first apartment,`` Ehrling explained. ``We build to order.``

The company sold 2,000 homes last year as opposed to 1,850 in 1983, Ehrling said. Revenues were $329 million vs. $270 million in `83. Ehrling declined to disclose net profits for the private company.

``One of the challenges of real estate in Florida is the cycles. The skill in managing a company like this one is being able to operate in all kinds of economic climates,`` Ehrling said.

As GDC sells its remaining homesite plots, its revenue stream from home sales is overtaking homesite sales. The company is moving into a new era where home sales are becoming a more significant part of the business as compared to the past growth from selling just the land.

Over the last five years, housing revenues have jumped 58 percent, while homesite marketing revenues have risen 38 percent. Home sales now account for 46 percent of the company`s revenues.

A new GDC entry into the housing market is its Five Star Homes, a venture into what the company terms ``primary housing.`` The company builds housing in existing communities and then sells it locally. GDC is selling homes in its Starlight Coves and Camelot Villages in Broward County as part of the Five Star division. Homes in those developments, with a total of 590 housing units, are selling for prices ranging from $89,000 to $130,000, Ehrling said.

As its home market division continues a steady upward climb, GDC is moving to diversify its real estate operations by either developing commercial or industrial property on tracts near its existing communities or selling off prime commercial property that has matured.

The next move, says Ehrling, is to consider the savings and loan industry. Those institutions make loans to homeowners, which is a natural extension of GDC`s existing business.

``We are looking closely at opening thrifts,`` he said. ``We would consider competing in the Miami market and other parts of Florida.``

The savings and loan would be a good source of generating income, Ehrling said, and would also provide funds for those who want to buy housing from GDC.